KEY POINTS

  • Farley initially joined Ford in 2007 as global head of marketing and sales
  • Hackett will remain as a special adviser at Ford through March 2021
  • Ford reported a $1.9 billion loss for the second quarter

Jim Hackett, 65, will retire as Ford Motor Company's (F) president and CEO and will be succeeded by current chief operating officer Jim Farley, effective Oct. 1, the company said Tuesday.

Ford said Farley, 58, will work with his predecessor on a “smooth leadership transition over the next two months.”

Farley initially joined Ford in 2007 as global head of marketing and sales. He was named chief operating officer in February 2020 during a management shakeup.

“Jim Farley matches an innate feel for cars and customers with great instincts for the future and the new technologies that are changing our industry,”  Executive Chairman Bill Ford said.

"Jim’s passion for great vehicles and his intense drive for results are well known, and I have also seen him develop into a transformational leader with the determination and foresight to help Ford thrive into the future.”

Hackett will remain as a special adviser at Ford through March 2021.

“I am very grateful to Jim Hackett for all he has done to modernize Ford and prepare us to compete and win in the future,” said Bill Ford.

The company added: "Under Hackett, Ford moved aggressively into the new era of smart vehicles and drove a deeper focus on customers’ wants and needs. At the same time, Ford improved the fitness of the base business – restructuring operations, invigorating the product portfolio and reducing bureaucracy."

CNBC reported that Hackett’s departure is likely tied to an ongoing $11 billion restructuring plan that has not impressed Wall Street.

Ford shares have plunged about 28% year to date.

The Detroit Free Press noted that Ford has struggled under Hackett’s leadership – with a series of troubled product launches involving the Ford Explorer, the Lincoln Aviator, and the Police Interceptor. He also often issued apologies after disappointing sales and earnings reports.

Hackett took over Ford in May 2017 – he had succeeded Mark Fields, who served in the top post for less than three years.

Farley becomes Ford’s fourth chief executive since the financial crisis of 2008, which nearly bankrupted the automaker.

In February of this year, Hackett suggested he would not step down anytime soon.

“I plan on staying in this job,” he said at the time.

Ford reported a $1.9 billion loss for the second quarter, after incurring a $2 billion loss in the first quarter.

As of 10:20 a.m. EDT, Ford shares were up 2.3%.